Over the last two weeks, I’ve had a front-row seat watching a company completely fumble a policy change roll out. The problem they are attempting to solve is legitimate, as is the proposed solution. The problem was with the way they made the decision and how they communicated it, or rather didn’t, to their stakeholders.

My client, a distributor for the company in question, has already lost over $100k in sales in the last two weeks and is unlikely to staunch the bleeding until it reaches multiples of that number. I can only imagine the total cost considering the large number of distributors that exist. We are talking millions in lost sales. There’s no way to measure the damage to the brand at this point, nor the opportunity cost of two weeks’ worth of the distraction and chaos that ensued.

The brand made two fundamental mistakes. The first mistake was not including the distributors in the discussion. While the distributors might not have been pleased with the proposed solution, the company would have had time to understand the implications of the policy change from the distributors’ point of view and the opportunity to mitigate that impact. The company would have also unearthed a second option to achieve the same result without the disruption. One they didn’t learn about until it was too late.

The second mistake was the communication and lack thereof. The single distributor update that was sent out is a master class in doublespeak and obscuration. My client has spoken to several other distributors, and so far, no one understood the communication as announcing anything even faintly disruptive. It’s almost as if political copywriter was the author.

As I’ve advised my client through the mitigation of this fiasco, I’ve thought a lot about the root cause of this type of behavior. My conclusion is that our business culture, in the U.S. in particular, has forgotten the etymology of the word company. It is derived “from Late Latin companio, literally “bread fellow, messmate,” from Latin com “with, together” (see com-) + panis “bread,” from PIE root *pa- “to feed.””

Regardless of the legal structure, if we are working together in any ongoing way, I believe that we are “of the same company.” That includes partners, vendors, distributors, and anyone in the supply chain. It involves the communities we live in and the families that those depend on the paychecks of the people we labor beside.

The larger our organization, the more people, human beings, are impacted by the decisions we make. And we have a responsibility to consider all our stakeholders when we make decisions. In a business world that primarily values the shareholder above everyone else, that may sound old-fashioned or naïve. If so, color me old-fashioned and naïve, but I believe that is what makes being a C-Suite member such a high calling.

One of the reasons that I’m a C-Suite Network AdvisorÔ and a Hero Clubä mentor is because I want to work with people that see their corporation as more than just a personal piggy bank or monument to their ego. And so, I offer this piece of advice: recognize that you have a responsibility as a business owner or C-Suite leader to consider the impact of your decisions on all your stakeholders, and you will naturally include them in the decision-making process – and avoid the mistakes and loss of business illustrated above.

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